Care Workers paid under the National Minimum Wage

That headline won’t come as much of a surprise judging by the comments we receive under main Care Workers rights guide. A report by The Resolution Foundation published at the end of August, called ‘Does it pay to Care? Under-payment of the National Minimum Wage in the social care sector’ found it to be the case.

The Resolution Foundation works to improve living standards for the 15 million people in Britain on low and middle incomes.

The Report said that:

While Care Workers ‘headline’ pay rates were set at or above the NMW of £6.19 per hour, many lost at least £1 per hour because they were not paid for the time spent travelling between appointments, and also because providing decent care often takes longer than the time allocated by the employer to each visit.

There are an estimated 2 million care workers in the UK, of which 830,000 are ‘domiciliary’ care workers that carry out home visits. It is estimated that up to 220,000 of all care workers might be paid less than the minimum wage. Pay in the sector is already among the lowest in the UK, with the median hourly wage only 15% above the NMW.

The fact that a significant number of domiciliary care workers regularly receive less than the NMW for their labour should be a cause for serious concern. This is not only because the law is reasonably clear about the fact that time spent travelling between clients should be regarded as time worked for the purposes of the NMW, but because NMW under-payment has a direct impact on those who receive care.

The report questioned how, despite the law being reasonably clear in regards to travel time, many independent care providers are able operate pay systems that see care workers paid less than the national minimum without facing adverse consequences.

The answer partly lies in the legal complexities surrounding the application of NMW Regulations; and the lack of effective deterrents that might prevent providers from underpaying.

There is now widespread agreement that more effective enforcement of the NMW is required. It is clear that the enforcement powers available to HMRC to ensure employers pay at least the NMW are inadequate – the HMRC NMW Compliance Unit has been underfunded since its inception but its ability to carry out its statutory enforcement role has become increasingly challenging in recent years following a budget freeze. As a result the compliance and enforcement teams able to investigate employers who may not be complying with the NMW are small. NMW enforcement in the UK is also weighed heavily toward pro-active self-reporting on the part of workers. Investigations initiated by workers, ex-workers or third parties on their behalf, make up about 60% of HMRC’s total investigative caseload.

Sanctions for non-compliance in cases where underpayment of the NMW has been firmly established are set at levels which fail to act as an effective deterrent. The Employment Act 2008 strengthened the penalties that could be levied against employers found to have paid under the National Minimum Wage, but the penalty charge is capped at £5,000 and is halved if an employer complies fully with a notice of underpayment within 14 days of service.

The Deputy Chief Executive of The Resolution Foundation, Vidhya Alakeson, said if the UK wants better home care then it needs to invest more in the workers who provide it.

The Report recommended the following:

Abolition of 15-minute care slots and an end to work schedules which over-crammed appointments

Increasing the penalties facing companies which break the law

Clearer payslips, including average hourly rates, so care workers can see exactly how they have been paid

Ensuring care firms include a reasonable payment for staff travel time when bidding for contracts

A greater role for local authorities in monitoring legal compliance, more resources for HMRC’s compliance unit and a focus of resources on care work, as a high risk sector

Considering making both local authorities and care firms legally responsible for payment of the minimum wage to care workers. Ensure local authorities factor in the cost of the minimum wage when calculating the price they will pay for care and stipulate that care workers receive an hourly rate which includes travel time.

Better government guidance for the social care sector on applying the minimum wage.

The full report, which includes real case studies of Care Workers, is here.

The law as it stands on travelling time

“Unless genuinely self-employed a worker travelling for the purposes of duties carried out in the course of his or her work will be required to be paid at least the minimum wage (excluding the first and last journeys during any particular period of duty).”

‘Travelling’ is defined in Regulation 7 of the NMWR as:

In the course of a journey by mode of transport or on foot;

Waiting at a place of departure to begin a journey by mode of transport;

Where the journey is broken, waiting at a place of departure for the journey to recommence; and

Waiting at the end of a journey for the purpose of carrying out duties (excluding any time spent – if any on a rest break).

In August the Government promised to crackdown on Employers who do not pay the minimum wage. In 2012 the HMRC served notices to 879 Employers about underpayments to staff.

The Government run a Pay and Work Rights Helpline which can advise you about the NMW – on 0800 917 2368 – they also deal with complaints from workers who are being paid below the threshold.

If you are an Employer and need ongoing professional help with any staff/freelance issues then talk to us at The HR Kiosk (click here) – a Human Resources Consultancy for small businesses – you can hire us for as much time as you need.

Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.

My Crunch

Social

Crunch is a trading name of E-Crunch Ltd,
a limited company registered in England under company number 06014477.
Our registered office is:
Unit 11, Hove Business Centre, Fonthill Road,
Hove,
East Sussex,
BN3 6HAUK

Call 03333 318 134

Let's arrange that for you!

Call us on 03333 318 134, or leave your details and we’ll call you back.